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Alcoa Expanding Iowa Plant to Meet Auto Industry Demand

Company expects more aluminum to replace steel in auto applications.

Aluminum producer Alcoa Inc. will invest $300 million to expand its rolled-products plant in Iowa to meet the auto industry's demand for more lightweight materials, the company said Sept. 15.

Expansion of the Davenport, Iowa, facility is scheduled to be completed by the end of 2013. The company expects the project will add 150 jobs to the plant, bringing total employment to 2,300.

The company selected the Davenport facility based partly on an incentive package from the Iowa Department of Economic Development. The package includes tax, financing, research and development credits and training grants for the Davenport workforce.

Alcoa will produce aluminum that will replace steel in automotive applications, including enclosure panels and hoods, as well as structural components, says Alcoa spokesman Kevin Lowery.

The auto industry is replacing traditional steel that is heavier and less flexible with lighter, high-strength materials to meet fuel-economy standards.

Aluminum poses the greatest competitive challenge to the steel industry's ability to meet the auto industry's demand for lighter materials. Steelmakers have responded by producing more advanced high-strength steel grades.

The Davenport expansion will primarily serve auto business that has already been secured, said Helmut Wieser, Alcoa executive vice president and group president of Alcoa Global Rolled Products.

"However, we see huge opportunity beyond this for our leading technology solutions in this market, including our patented Alcoa 951 technology, which we expect to license throughout the industry," said Wieser in a prepared statement.

Alcoa 951 is used to improve adhesive bonding for vehicle assemblies.

See also:

Aluminum Threatens to Overtake Steel in Auto Production

Steel Industry Faces Weighty Ultimatum

Nucor Expects to Replace Steel Grade Currently Sourced From Japan

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